Interest free loan - Capital Acquisitions Tax

Does anyone know if an interest free loan from a parent to a child would be caught by Capital Acquisitions Tax?

The plan is for a parent to loan an amount to a child to allow them to purchase a house. The loan will be repaid (in time), but no interest will be paid. Will the revenue consider the deemed interest as a gift to the child, and therefore use up part of the CAT threshold. Assume for the moment that the EUR3000 small gift exemption has been used up each year. Thanks

Re: Intetest Free Loan - Capital Acquisitions Tax

jimbo said:

Will the revenue consider the deemed interest as a gift to the child, and therefore use up part of the CAT threshold. Assume for the moment that the EUR3000 small gift exemption has been used up each year. Thanks

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Yes

Are there any ways to avoid this?

You're threshold with your parent is 496K.

I think half the parents in the country are financing house purchases for children in different ways,I don't think the revenue is too ruthless in this area